South African Gets Approval For a Casino In New Jersey

By JONATHAN RABINOVITZ

Published: October 23, 1997

ATLANTIC CITY, Oct. 22—
Sol Kerzner, a flamboyant casino magnate who has been described as South Africa's answer to Donald J. Trump, won approval today from the New Jersey Casino Control Commission to operate a casino here despite evidence that he helped bribe a government official in Africa more than a decade ago.

The commission's unanimous decision allows Mr. Kerzner to close a deal for his company, Sun International Hotels, to take over the Resorts Casino Hotel here and cements his position as one of the leading figures in the gambling industry.

In addition to his stake on the Boardwalk here, Mr. Kerzner's company owns at least 10 acres in Atlantic City, a casino and hotels in the Bahamas and a 50 percent interest in the partnership that manages one of the nation's largest casinos, Mohegan Sun, on an Indian reservation in eastern Connecticut. Over the last three years, these developments have made the fast-growing Sun International among the dominant gambling companies on the East Coast.

Mr. Kerzner's hold on his gambling empire was not assured until this afternoon when New Jersey regulators ended a yearlong, million-dollar investigation into Mr. Kerzner, Sun, an array of subsidiaries and holding companies around the world and more than 50 business associates and Sun employees.

At the center of the case was whether Mr. Kerzner's participation in the payment of a 2-million-rand bribe -- roughly $900,000, according to New Jersey officials -- should disqualify him from getting a license to do business here.

In announcing the decision, Bradford S. Smith, chairman of the four-member commission, said, ''Based on the entire record before us, the unsavory aspects of the Transgames transaction are an aberration that occurred a decade ago, and Kerzner has clearly and convincingly demonstrated good character, honesty and integrity.''

The incident occurred in 1986 when Mr. Kerzner's previous South African company acquired another company, Transgames, in the Transkei, a black homeland state set up by the white-run South African Government. As part of the deal, money was funneled to the homeland's leader to assure that Mr. Kerzner's company would have a monopoly on the homeland's gambling market.

The commission found that such payments were not unusual in the Transkei, where corruption was widespread, but it did not excuse Mr. Kerzner's conduct.

The ruling, which was signed by Mr. Smith and two other commissioners, concluded that ''Kerzner committed bribery under New Jersey law by a preponderance of the evidence.'' A fourth commissioner, Diane Legreide, disagreed, saying it was ridiculous to apply New Jersey bribery law to a region like the Transkei.

All four commissioners agreed that state law did not require them to disqualify an applicant for bribery if more than 10 years had passed since the incident.

Mr. Smith noted that there was ''no other evidence in this record of any payment even remotely alike in character'' to the 1986 payment and that a host of people had praised Mr. Kerzner's integrity.

Mr. Kerzner is best known for his South African resort, Sun City, which became the focus of an anti-apartheid boycott by top musicians in the 1980's. His ties to the apartheid system prevented his effort to expand to Atlantic City in 1983.

In more recent years, Mr. Kerzner has been dogged by the bribery allegations and other charges of unsavory political dealing.

Today, he smiled broadly when Mr. Smith closed the meeting, offered his congratulations and said, ''Thanks again for investing in Atlantic City.'' Mayor James Whelan shook his hand and said, ''Welcome.''

''I feel very pleased,'' he said afterward, asserting that New Jersey had the ''toughest'' gaming regulators in the world. ''This allows us to expand even faster,'' he said.

Mr. Kerzner acquired Resorts at the end of last year. He has announced plans to invest $150 million in the ailing hotel, one of the least profitable of the city's 13 casinos, and to turn it into a new destination resort, the Beach Club, that will evoke the lost Atlantic City summer scene of decades past.